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Guide · 7 min read

UAE corporate tax for startups: registration, the 0% and 9% bands, and Small Business Relief

What UAE corporate tax means for an early-stage startup: who must register, deadlines, the 0%/9% bands, free zone rules and Small Business Relief, with MoF and FTA sources.

By Startup Roof Editorial ·

For a long time, "no corporate tax" was part of the UAE pitch to founders. That changed with Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. It applies to financial years starting on or after 1 June 2023 (Ministry of Finance). Most early-stage startups will pay little or nothing in their first years, but almost all of them still have to register, keep records and file.

This post covers what a founder needs to know in plain language, with links to the official sources. Before it starts, one warning from the Ministry of Finance itself: it asks the public to rely only on official publications from the Ministry and the Federal Tax Authority (FTA) on corporate tax (MoF). Treat this article as a map to those sources, not a replacement for them.

General information only, not tax advice. Your situation may differ. For decisions, read the official guidance and speak to a registered tax agent or adviser.

Who is covered?

According to the Ministry of Finance, corporate tax broadly applies to these "Taxable Persons" (MoF):

  • UAE companies and other juridical persons incorporated or effectively managed and controlled in the UAE;
  • natural persons (individuals) doing business in the UAE, as specified by Cabinet Decision;
  • non-resident juridical persons with a permanent establishment in the UAE.

If you have a free zone company, you are in scope too. The Ministry states that juridical persons in a free zone are Taxable Persons and must comply with the law. A free zone company that meets the conditions of a Qualifying Free Zone Person can benefit from a 0% rate on its Qualifying Income (MoF). That status comes with conditions, so don't assume it applies to you just because you are in a free zone.

If you trade as an individual (for example as a freelancer), the FTA's registration rules for natural persons apply. The site's own UAE setup guide summarises the FTA's turnover trigger for individuals.

The rates: 0% and 9%

Cabinet Decision No. 116 of 2022 sets the threshold. Taxable income up to AED 375,000 is taxed at 0%, and the portion above AED 375,000 at 9% (Cabinet Decision No. 116 of 2022, PDF).

Two points founders often get wrong:

  1. It's about taxable income, not revenue. The starting point is your accounting profit (net profit or loss before tax), adjusted for items such as exempt income and non-deductible expenses (MoF). A startup with strong revenue but a loss may owe nothing, and still has to file.
  2. 0% is not the same as "not registered". A startup under the threshold still registers and files a return.

Registration: the step not to miss

The Ministry of Finance states that all Taxable Persons, including free zone persons, must register for corporate tax and obtain a Corporate Tax Registration Number (MoF). Registration is done through the FTA (FTA: corporate tax registration).

When? FTA Decision No. 3 of 2024 (effective 1 March 2024) sets the timelines. For a company incorporated or established in the UAE (including in a free zone) on or after that date, the general rule is three months from the date of incorporation, establishment or recognition (FTA Decision No. 3 of 2024, PDF). Companies set up before March 2024, and non-residents, have different deadlines in the same decision.

Late registration carries an administrative penalty. The FTA has announced a waiver initiative: the late-registration penalty is waived if the first tax return (or, for exempt persons, the annual declaration) is filed within seven months of the end of the first tax period (FTA: Waiver of penalties). Read the conditions on the FTA page; don't plan around a waiver if you can simply register on time.

Founder habit: the day your licence is issued, put the three-month registration deadline in your calendar.

Filing and paying

Corporate tax is self-assessed. You calculate it and file a return with the FTA for each tax period, usually your financial year. Per the Ministry of Finance, the return is due within nine months of the end of the tax period, and any tax due is generally payable by the same deadline (MoF).

So a startup with a financial year ending 31 December 2026 would generally file and pay by 30 September 2027. Check your own tax period on EmaraTax.

Small Business Relief: what it is and when it ends

Small Business Relief (SBR) exists to "support start-ups and other small or micro businesses by reducing their Corporate Tax burden and compliance costs", in the Ministry's words. It comes from Ministerial Decision No. 73 of 2023 (MoF announcement). In short:

  • Who: resident Taxable Persons whose revenue in the tax period, and in every previous tax period, stays within the AED 3 million threshold. Once you exceed it in any period, the relief is no longer available.
  • Effect: if you elect SBR, you are treated as having no taxable income for that period.
  • Time limit: the threshold applies to tax periods starting on or after 1 June 2023 and only to tax periods ending on or before 31 December 2026. For a calendar-year startup, 2026 is the last year currently covered. Watch for MoF/FTA updates on later periods.
  • Not available to: Qualifying Free Zone Persons, or members of multinational groups with consolidated revenue above AED 3.15 billion.
  • Losses: in periods where you don't elect SBR, you can carry forward tax losses and disallowed net interest expenditure under the decision's rules.
  • No splitting: if the FTA finds a business was artificially separated to stay under the threshold, that can be treated as an arrangement to get a tax advantage under the law's anti-abuse rules.

All of the above is from the Ministry of Finance announcement. The FTA also has a Small Business Relief topic page with guidance.

Founder trade-off to discuss with an adviser: electing SBR keeps compliance light, but losses from an elected period can't be carried forward the same way. If you expect early losses and later profits, ask whether electing every year is right for you.

Free zone founders: three questions to ask

  1. Are we aiming to be a Qualifying Free Zone Person? If so, which conditions apply, and which of our income would count as Qualifying Income?
  2. If we aim for QFZP status, we can't use SBR. Which route suits our numbers better?
  3. Do we sell to the mainland? That affects both your licence and your tax position.

Your free zone authority and a registered tax agent are the right people to ask. The MoF corporate tax page is the place to start reading.

Don't forget VAT

Corporate tax and VAT are separate. VAT registration becomes mandatory once your taxable supplies and imports pass the FTA threshold, and voluntary registration is possible earlier (FTA: VAT registration). Many founders register for corporate tax and forget to track the VAT trigger as sales grow.

A simple corporate tax checklist for year one

Where Startup Roof fits

Tax is one of many things a first-time founder has to get right while also finding customers. Startup Roof is a UAE-first founder ecosystem with source-checked guides, tools and a founder network, built to help you take the next clear step. Explore it at startuproof.com.

Sources (checked 15 Oct 2026)

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